Levitt: The Globalization of Markets

Levitt: The Globalization of Markets

Theodore Levitt has written articles that have paved the way for people to think innovatively. Among his important works are "Marketing Myopia" and "The Globalization of Markets," published in 1983. While "Marketing Myopia" deals with the notion that companies should become more aware of meeting the needs of customers, "The Globalization of Markets," focuses on the technological advancements in society and how companies can benefit by producing standardized products globally. Essentially Theodore Levitt advises companies that wished to survive in the long-term should expand quickly to global scale.

Levitt argues that new technology has "proletarianized" communication, transport, and travel. The essence of what he is saying is that the public wants a piece of the new innovation in other markets at a low cost. Levitt argues that well-managed companies shift from designing customized items to offering "globally standardized products." These products need to carry the characteristics of manufacturing the "most advanced things that the world makes and sells--goods of the best quality and reliability at the lowest price"(93, Harvard Business Review).

Levitt discusses the different outcomes of multinational companies vs. global companies. He indicates that multinational companies that concentrate on the unique consumer preferences, have become unable to become successful because they are hindering themselves from both pursuing and prospering in a global market. Levitt adds that only global companies can be successful in the long term by focusing on what everyone wants rather than worrying about the details of what everyone thinks they might desire. In order to achieve that, Levitt introduces the theory that products are becoming more 'homogenous'. By products becoming more homogenous (alike), they are able to cater to a larger demographic geographically. Rather than making a product that fits only a certain city, state or nation, Levitt argues that it is important to make them standard all across the board. To exemplify this idea, he used an example of a famous washing machine company named Hoover. Hoover, a washing machine manufacture attempted to expand their business under the strategy of multinational. Hoover targeted Germany and in doing so they attempted to retail a washing machine that was higher in price and less practical. Hoover failed to understand that demographically targeting the market, which has a higher income and is more sophisticated would lead to less sales. The public wanted something simple and inexpensive.

Levitt's analyses of the different ways to enter markets are accurate for its time, but are debatable in today's ever-evolving times. Levitt's assessment of transcending into